Catholic school investigated over alleged $5 million training rort

A Catholic school in Melbourne's south-east is being investigated by the schools' watchdog over explosive claims of a $5 million state government funding rort.

The alleged scam was carried out at St John's Regional College in Dandenong. It is understood it involved exploiting government training subsidies by dishing out cooking qualifications to students who never received any training.

St John's Regional College in Dandenong. Credit:Simon Schluter

Many of the students caught up in the alleged scam did not attend the school, and some were adult migrants who had studied overseas and wanted to quickly gain an Australian qualification.

The Victorian Registration and Qualifications Authority confirmed it was investigating the training delivered by the school – which is also a registered training organisation – as part of a joint probe with the Catholic Education Commission of Victoria and the Victorian Department of Education.

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Forensic auditors have seized school files and notebooks to try and work out what happened to the missing millions.

While training rorts have plagued the private college sector, this is believed to be the first scandal of this scale involving a Victorian school. It is particularly sensitive for Catholic Education Melbourne, which prides itself on ensuring government funds are not misappropriated.

The school's canonical administration – which is made up of local priests – sacked the former principal Andrew Walsh and former business manager Mark Siwek in September after the revelations came to light.

The Age is not suggesting that Mr Walsh or Mr Siwek were involved in the alleged scam.

The school's newsletter said that Mr Walsh left "suddenly for a range of reasons including family health reasons".

It is understood that he was upset and shocked when he was asked to leave the school he had run for almost eight years.

The school is located in a disadvantaged area, and almost half of its students have a language background other than English.

None of the money reaped through the alleged rort is believed to have been spent on students, and it is not known where it went.

Many regular students enrolled at the school have received proper training and there are fears their qualifications will be tainted by the alleged fraud.

The federal government's My School website shows that the school's income from other sources soared from $642,746 in 2012 to a staggering $5.9 million in 2013. In 2014, the school reaped $5.1 million from other sources.

On Monday, the blinds were drawn at the school's graduate restaurant, which is where the alleged fraud was believed to have taken place. Coffee cups were neatly stacked next to the espresso machine, and white serviettes were neatly folded in preparation for the next diners.

VRQA director Lynn Glover said that the investigation was initiated following complaints.

"The investigation is ongoing and it is therefore inappropriate for us to make further comment at this stage," she said.

A 2014 VRQA audit identified "non-compliance" but Ms Glover decided to renew the college's registration as a training organisation until April 2019.

The watchdog refused to release the audits, citing privacy concerns.

An Education Department spokesman said the school had held contracts to deliver state government funded training from 2011 to 2015. But it was unsuccessful in its bid for a 2016 contract.

The spokeswoman would not say how much funding the Catholic school had received under the Victorian Training Guarantee, or for how many students, citing commercial in confidence.

A Catholic education spokesman said it was inappropriate to comment while an investigation was under way.

An auditor-general's report released earlier this year found little evidence that state government grants for non-government schools, estimated to be $676 million this year, were being used appropriately.